Asset Backed Lending
Asset Backed Lending
The investment needed to bring inventory into your business can put significant pressure on your working capital and cash flow. Asset-Backed Lending provides a solution by unlocking the value of your assets and giving your business the funds it needs to grow and operate efficiently.
Many businesses in non-service sectors purchase inventory, raw materials, or stock for resale or manufacturing. Manufacturers, in particular, need to fund various stages of production—from acquiring raw materials to managing work-in-progress and holding finished goods. Relying solely on cash reserves to support these processes can tie up working capital for extended periods, leaving it underutilised.
How Does Asset-Backed Lending Work?
Asset-Backed Lending operates on a similar principle to Invoice Finance, but instead of advancing funds based on unpaid invoices, it uses the value of your inventory or other business assets as collateral. Essentially, Asset-Backed Lending allows you to generate finance against assets you already own, such as inventory, equipment, or machinery.
While the amount advanced is typically lower than the 90% offered with Invoice Finance (since no sale has been made), it still unlocks valuable working capital that would otherwise remain tied up in your assets.
When combined with Factoring or Invoice Discounting, Asset-Backed Lending can provide additional funding to support business growth, capital investment, acquisitions, management buyouts (MBOs), or other strategic needs.
Who Can Benefit from Asset-Backed Lending?
Asset-Backed Lending is particularly beneficial for businesses that:
- Sell products or services to other companies on credit terms.
- Hold significant levels of stock or inventory that tie up cash.
- Face cash flow challenges due to needing to pay for raw materials, staff, or suppliers before receiving customer payments.
Funding Potential
At Factoring Finance, we work with an extensive independent broker network to find the best Asset-Backed Lending solution tailored to your business’s specific needs. We can arrange corporate finance facilities ranging from AUD 100,000 to over AUD 20 million, depending on your requirements and growth objectives.
Why Consider Asset-Backed Lending?
Asset-Backed Lending is an excellent way to free up capital that is otherwise locked in your business’s assets, allowing you to:
- Improve cash flow without waiting for customer payments.
- Finance inventory and equipment purchases without depleting reserves.
- Scale your business more effectively by accessing funds when you need them.
If you’d like to learn more about Asset-Backed Lending or other invoice or asset-based finance solutions, feel free to explore the detailed sections of our website for more information on Factoring, Invoice Discounting, and other Commercial Finance options, such as Commercial Mortgages.